Climate Change and Economic Growth: Evidence from the Last Half Century

48 Pages Posted: 30 Jun 2008 Last revised: 19 Oct 2014

See all articles by Melissa Dell

Melissa Dell

Massachusetts Institute of Technology (MIT) - Department of Economics

Benjamin F. Jones

Northwestern University; National Bureau of Economic Research (NBER)

Benjamin A. Olken

Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER); Harvard University - Society of Fellows

Date Written: June 2008

Abstract

This paper uses annual variation in temperature and precipitation over the past 50 years to examine the impact of climatic changes on economic activity throughout the world. We find three primary results. First, higher temperatures substantially reduce economic growth in poor countries but have little effect in rich countries. Second, higher temperatures appear to reduce growth rates in poor countries, rather than just the level of output. Third, higher temperatures have wide-ranging effects in poor nations, reducing agricultural output, industrial output, and aggregate investment, and increasing political instability. Analysis of decade or longer climate shifts also shows substantial negative effects on growth in poor countries. Should future impacts of climate change mirror these historical effects, the negative impact on poor countries may be substantial.

Suggested Citation

Dell, Melissa and Jones, Benjamin F. and Olken, Benjamin A., Climate Change and Economic Growth: Evidence from the Last Half Century (June 2008). NBER Working Paper No. w14132. Available at SSRN: https://ssrn.com/abstract=1152673

Melissa Dell

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

50 Memorial Drive
E52-391
Cambridge, MA 02142
United States

Benjamin F. Jones (Contact Author)

Northwestern University ( email )

2001 Sheridan Road
Evanston, IL 60208
United States
847-491-3177 (Phone)
847-467-1777 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Benjamin A. Olken

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

50 Memorial Drive
E52-391
Cambridge, MA 02142
United States
617-253-6833 (Phone)
617-253-1330 (Fax)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States
617-588-1407 (Phone)

Harvard University - Society of Fellows

Cambridge, MA 02138
United States

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